For many persons purchasing a motor vehicle for the first time, the process can be daunting. However, Ricardo Williams, head of branches- eastern at JN Bank, says that in reality, it’s not a difficult process at all. If you’re planning to purchase a motor vehicle in 2023, here are some tips.
First step- get a licence
“The first thing you want to ensure is what you do prior to buying a vehicle, is to obtain your driver’s licence. Some people may say that goes without saying, but it is really the first step. While you can obtain insurance on a vehicle as soon as your licence is three months old, it is also advisable to wait until your licence is at least one year old, as this could reduce your insurance premium significantly,” Mr Williams says.
Have a budget
Save towards your vehicle and have a budget for how much you intend to spend, he advises, as often, there are costs you will need to fund that are not included in the loan.
“Although some financial institutions may bundle the first insurance, licence and fitness of a new vehicle into one cost, which is then rolled into your loan payments, others do not; and therefore, the buyer may need to come up with a deposit based on: the year of the car, insurance fees, licence and fitness costs.”
Decide on the vehicle that you want
Think about your budget as well as what you will be using the vehicle for, Mr Williams said. Do you want a car, a Sports Utility Vehicle or a pick-up? Choosing the type of vehicle that you want will also help you to narrow down the brand and models that you are interested in. Ensure that the vehicle you choose meets your needs.
Choose your financing carefully
Depending on the financier and the year of the vehicle, persons may be able to get 100 per cent financing. Shop around and see what each institution has to offer.
Documents you’ll need
Mr Williams points out that most financial institutions will ask for more or less the same documents to start the auto loan process.
“Most financial institutions would require a valid government-issued identification, taxpayer registration number, birth certificate, proof of employment, or an income verification form, last three payslips, proof of address, a pro-forma invoice from the car dealership, proof of deposit where applicable, motor vehicle valuation report and a copy of the certificate of motor vehicle fitness,” he says.
A few costs you should know about
There are a few additional costs buyers may need to consider. For example, Mr Williams says, the buyer would likely need to have a credit check done and this is usually at a cost to the purchaser. He says a credit check is a critical step in the auto loan process, as it determines the individual’s eligibility for the loan and the maximum amount that a customer will receive.
Another cost, which Mr Williams says buyers may have to be prepared for is the processing fee for the loan- which varies across institutions- and also legal fees.
Insuring your vehicle is mandatory. Get a quote from more than one insurer so you can know ahead of time if you can afford that particular amount of insurance, Mr Williams advises.
He notes that the age, history, value and the choice of vehicle being purchased will all help to determine the insurance premium that will be paid. This includes the model, make and year of the vehicle. High-end vehicles, sports cars and vehicles with high horse power, for example, he pointed out, will attract a higher premium.
Mr Williams says JN Bank makes accessing auto insurance convenient for persons receiving an auto loan through the institution. The JN Auto Sure Cover Loan is uniquely designed, he says, to cover both the funds to purchase the vehicle and the insurance in one single monthly payment.
“The loan includes accident forgiveness, which means that even if you have an accident your loan payments won’t increase,” Mr Williams says.
“Your insurance certificate will be delivered annually to you; and through our JN sister company the Jamaica Automobile Association, you’ll benefit from unlimited roadside assistance and free document renewal services- when your motor vehicle documents expire they’ll collect them from you and have them renewed at no cost. You only pay the usual fees that the tax office charge. Nothing extra!”
He says the JAA will even take your vehicle to get the fitness done for you- also for free.